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Winnipeg Housing Starts Continue Pullback in 2016 and 2017

WINNIPEG, MANITOBA--(Marketwired - May 18, 2016) - According to Canada Mortgage and Housing Corporation's (CMHC) Spring 2016 Winnipeg Housing Market Outlook released today, total housing starts in the Winnipeg Census Metropolitan Area (CMA) are projected to decline from 4,400 units in 2015 to a range between 3,600 to 4,200 units in 2016 and 3,600 to 4,150 units in 2017.

"Total starts will continue to decline for the next two years, continuing a trend downward from a peak reached in 2013," said Braden Batch, CMHC's Senior Market Analyst for Manitoba. "Inventory levels remain elevated, specifically in multi-unit condominium apartments, prompting fewer new builds," added Batch.

The forecasted range of single-detached housing starts in 2016 is 1,650 to 1,750 units, and in 2017 1,479 to 2,021 units after reaching 1,649 units in 2015. Single-detached units will essentially be stable with potential for growth over the forecast period. "Total single-detached supply levels, including both under construction and complete and unsold units, have declined. This will give builders some room to increase starts in this market," said Batch.

Multi-unit starts (apartments, row, and semi-detached units) declined in the first quarter of 2016, and are expected to decrease over the forecast period. The forecasted range of multi-unit starts is 1,550 to 1,950 units in 2016 and 1,500 to 1,900 units in 2017. Overall multi-unit starts were down 27 per cent during the first three months of this year and trended downwards from a peak in December 2015.

MLS® sales are expected to range from 12,350 to 12,700 in 2016 and 12,500 to 12,900 in 2017 after finishing 2015 with 12,267 transactions. In the existing home market, sales have been remarkably stable around 3,000 sales per quarter on a seasonally adjusted basis since the second quarter of 2009. By contrast, the current trended sales shows an uptick to 3,300 sales per quarter. After a strong year of employment and income growth in 2015, and an uptick in net migration driven by fewer people leaving to other provinces, the current growth trend in existing home sales is supported by demand fundamentals.

The average MLS® price averaged $278,270 in 2015 and is expected to range between $274,950 and $289,050 in 2016 and between $278,850 and $293,150 in 2017. After years of sellers' market conditions, the market moved into balanced conditions nearing the end of 2014, and has been stable in balanced conditions since that time, allowing for prices to grow on a moderate trajectory.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.